We sat down with Andrew Sutton, Visiting Fellow at the Oxford Martin School AI Governance Initiative and research adviser on The Future of AI Governance and Compliance in Financial Services research report, following the roundtable discussion at its launch in the House of Lords. Andrew reflects on the scale of change AI represents, why it reshapes existing risks rather than simply adding to them, and how the industry can respond together.
- The scale and uncertainty of AI requires firms to engage now
AI is conceivably one of the largest technological shifts we have seen, on the scale of the industrial revolution, and the range of plausible ways it develops is very wide. Financial institutions do not have the luxury of reacting to events as they unfold. They need to proactively understand and manage the risks this creates.
- AI reshapes existing risks rather than adding one more to the taxonomy
The challenge is not only how a firm deploys AI within its own walls, but how AI is deployed around it, by competitors, adversaries, fraudsters, clients and the wider economy. As this begins to change society, it undermines the assumptions that risk management processes depend on and the controls firms have traditionally relied upon. AI may fundamentally change many different risks at once, at a pace institutions are not yet prepared to manage.
- The industry has a mature foundation to build on, and the will to do it together
Financial services already has a mature system of risk mitigants across corporate governance, technical controls and regulation, so there is a lot to work with. The open question is where traditional approaches still hold and where new ones are needed. Firms from across the industry are grappling with the same challenges and the same lack of certainty, and there is clear goodwill, a readiness to engage, and a desire to work with regulators and stakeholders on shared solutions.
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